I just would like to know if the six figure lawsuit settlement that iam getting will be taxed by the irs if?

Question

I was just wondering that,because since its a once time income will it be taxed like they do the lottery.If get the money from my lawyer will i have to report this to irs, because its just enough to buy a house and i would hate that the damn irs would have to take some of my money? so if any one can answer this

thank you

Answer 1

What is the settlement for? Depending on what is was from it can be taxable, and it can be non-taxable. I've attached a link to irs lawsuit guidelines to help you determine whether your settlement is taxable or not.

Answer 2

You don't give enough info for anyone to say whether or not it will be taxable. That depends on what it's for.

You talk about the "damned IRS" taking some of the money - I don't hear you griping about the "damned lawyer", and his or her cut will likely be larger than the taxes even if it does turn out to be a taxable settlement.

Answer 3

Talking about US Federal Tax:

Just how does taxation fit into the picture? The IRS provides guidelines for the following awards:

» Physical injuries or physical sickness settlements -
If you did not previously take an itemized deduction for medical expenses related to these injuries or sickness in prior years, the award amount is not taxable and does generally not need to be reported on your Form 1040. However, if you did deduct medical expenses related to the injury, the tax benefit amount is taxable and reportable.

» Emotional distress and mental anguish -
Only amounts that exceed medical costs and that have not been previously deducted are reportable. You will need to attach a statement showing the entire settlement amount less related medical costs to the Form 1040.

» Employment discrimination or injury to reputation -
Taxable; reported on Form 1040.

- Interest -
Taxable as "Interest Income" on Form 1040.
- Punitive damages -
Taxable; reported on Form 1040. It does not matter if punitive damages are related to a physical injury or physical sickness. If they are considered punitive, they are reportable.

- Loss of use or loss in value of property -
Only the gain (the amount that exceeds your basis) is taxable when property settlements exceed your adjusted basis in the property. This amount is treated as a "Gain on a Capital Asset" and is reported on Schedule D, Capital Gains and Losses, of the Form 1040 for personal capital assets and on Form 4797, Sale of Business Property, for business capital assets.

Note: Unless otherwise stated, taxable amounts are reported as "Other income" on Form 1040.

If your settlement is significant, with expected taxes of $1,000 or more after subtracting credits and withholding, you may need to make estimated tax payments. IRS Publication 505, Tax Withholding and Estimated Tax and Form 1040-ES, Estimated Tax for Individuals, provide more information. The services of a tax preparer may be your best recourse in sorting out the intricacies of settlement awards.

Selecting the right tax professional will save you time, headaches, and oftentimes money.

Answer 4

They already are. church homes and every person is already exempt from the IRS. Its purely that some human beings "volunteer" to make up a company and contact it a church which, then, they arrive over into their area. The IRS (theirs) is a company itself that's owned by using the Federal Reserve so, who're they actually? Why have they have been given all this potential? Any jury ought to nullify something that they do against somebody. i think of their purely status is with the firms.

Answer 5

Depends upon what the settlement is for.

Settlements for physical injury or illness are not taxed. However if any portion is earmarked for lost wages, interest or punitive damages that portion will be taxable.

Also, settlements that only make you whole again are not taxed to the extent that the monies received return you to your pre-settlement position. Anything above that is taxed.

Answer 6

In most cases yes. Pay for the house, you still have to pay yearly taxes on it.

Answer 7

search on IRS website - www.irs.gov or talk to a CPA

Answer 8

unfortunatly I will be, governments gotta get fed too!